Meeting with “another” man who calls himself Red — outside a medical clinic in Panorama City.

“$200.”

That’s what Red offered to pay this senior citizen for her prescription.

“You get your Oxycodone. 30mg. And I’ll give you $200.”

Oxycodone is a pain killer. Dangerous and addictive.

“It’s just really sad.” Michelle Jacobsen knows this first hand because her 17-year-old son, Kellin, has been addicted to the drug for over a year. He’s now in rehab.

“Maybe there is a chance I can get my son back. And he can have a normal life. And it’s not just gonna be all thrown…away…for drugs.”

There’s no telling where Kellin’s prescriptions came from — but experts say many are paid for by Medicare before they hit the streets.

We followed Red for two months. Brining van loads of patients to the clinic — then back to his van. Sometimes three times a week.

“Talk to him.”

We videotaped Red’s patients inside waiting to see a doctor.

“Thank you.”

Then followed them to a pharmacy nearly 40 miles away in Ranchos Palos Verdes…where the prescription was filled.

“What do I do here?”

Outside the clinic he told this senior citizen who was working with us, how it works. By signing up for Medicare Part D which pays for prescription drugs.

“They’ll send you a new prescription card, is what they’ll mail you. Then when you take your card to the pharmacy, all your medication is free.”

But first, he instructs her to see a doctor at the clinic.

“You tell him your back hurts.”
“Tell him my back hurts…?”

Red says she’ll get a prescription for Oxycodone. Then he’ll take her to the pharmacy where Medicare — taxpayers — pay for most of the cost. And that’s where he comes in.

“What do I do with the pills after I get the prescription?”
“I’m buying the pills. That’s why I’m giving you $200 for them.”

Our senior didn’t go through with it. But police say the Oxycodone that Red offered $200 for, would sell for as much as $900 on the streets.

“Good profit?”
“Great profit!”

This undercover detective sees it all the time.

“It’s the most commonly abused drug in today’s society. And in this case, we found Medicare…taxpayer’s footing the bill.”

Hey Red. David Goldstein with CBS 2 News.

Red denied what we caught on tape.

We have undercover video of you offering to purchase prescription drugs paid for by Medicare for $200.”

“No, not me.”

We have undercover video of you instructing a senior citizen.

“No, not me.”

How to defraud Medicare.

“No, not me.”

Are you defrauding the taxpayers?

“No.”

The clinic is the Roscoe Van Nuys Medical Clinic.

According to the California Medical Board it’s registered to Dr. Mohamed El-Toukhy. El-Toukhy is currently serving 15 months in Federal prison for health care fraud. But there are other doctors working there.

We videotaped Red numerous times — bringing in patients — talking to the staff.

“See you in the morning.”

But a woman who works there — said she didn’t know him or anything about what was going on.

“This gentleman is offering to purchase prescriptions that were obtained here through Medicare basically ripping off the taxpayers. It’s not possible that we would know that.”

Sources say the clinic is under investigation by state and Federal authorities. One of the many being looked at in Southern California, as the buying and selling of prescription drugs is turning up all over town.

“Hands on the car!”

Downtown we watched police make arrests after an undercover officer bought prescription drugs on the street — allegedly paid for by Medicare.

“Taxpayers pay for these drugs.”

And in Van Nuys a task force of state and Federal investigators raided another clinic.

“Keep going.”

Inside they found half a dozen Medicare recipients waiting for prescriptions that detectives suspect would be sold 75-year-old Donald Johnson was inside but claims the person who brought him here didn’t offer anything.

“He gave me a ride. He didn’t tell me nothing about getting paid.”

“I don’t want to go to jail.”

And remember this guy…who wasn’t talking? Police claim he is paying seniors to go to the clinic for drugs.

How many people you been bringing in?

“None of your motherf—ng business.”

Glenn Ferry heads of the Southern California office of the Inspector General for Medicare Fraud: “There’s millions of dollars lost every year. Not just to Medicare but to the taxpayers.”

“It’s pure greed. We are going to start putting people in jail including doctors, pharmacists, that have crossed that line and don’t have the welfare of the patients in mind.”

But guys like Red remain on the streets…

“You get your Oxycodone. 30mg. And I’ll give you $200.”

He and others, offering to pay seniors for prescriptions. Using taxpayer money to fuel the drug trade.